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Sales Planing

Different Revenue Types in B2B and B2G

The Verter Studio framework supports six revenue types: one-time fees for setup and implementation, annual licenses recognized over their term, true monthly subscriptions, transaction fees as a percentage of value, usage-based metered revenue, and professional services billed by the hour or project. You can assign different types to different products, different customers, different segments.

2 min read

Different Revenue Types in B2B and B2G
Different Revenue Types in B2B and B2G
Different Revenue Types in B2B and B2G

Different Revenue Types in B2B and B2G

I was on a call with a founder last week, and I asked the usual question: "What's your revenue model?" The answer came back instantly: "Subscription." But as we kept talking, the picture got more complicated. There was an implementation fee at contract signing. Annual licenses that renewed with the contract. Transaction fees on certain features. Professional services for customization. What they called "subscription" was actually four or five different revenue streams with completely different recognition patterns.

This is normal in B2B & B2G. Government and enterprise deals are rarely simple monthly subscriptions. They're complex bundles of products and services, priced differently, paid on different schedules, and recognized over different time periods. The founder wasn't wrong to call it "subscription revenue" — that was the core — but the simplification was hiding important details about cash flow and margins.

Most financial templates force you to pick one revenue model and stick with it. Monthly recurring revenue, annual contracts, or usage-based — choose your adventure. But real businesses, especially in the government space, don't fit neatly into these boxes. You might have one-time implementation fees that recognize immediately, annual licenses that spread over twelve months, and transaction fees that fluctuate based on usage. All from the same customer, all in the same contract.

The Verter Studio framework supports six revenue types: one-time fees for setup and implementation, annual licenses recognized over their term, true monthly subscriptions, transaction fees as a percentage of value, usage-based metered revenue, and professional services billed by the hour or project. You can assign different types to different products, different customers, different segments. The model handles the complexity so you can see gross margin by revenue type, cash flow by payment structure, and unit economics that actually reflect your business.

The point isn't to make your model more complicated for its own sake. The point is that your pricing complexity is a feature, not a bug. It reflects the reality of selling to sophisticated buyers who want flexibility. Your financial model should capture that reality, not pretend it doesn't exist.

→ OneTime: Implementation, setup, onboarding fees
→ Annual: Licenses recognized over 12 months
→ Subscription (m): True monthly recurring
→ Transaction Fee: Per-transaction percentage
→ Usage-Based: Metered consumption
→ Professional Services: Consulting, customization, support

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Cash is a king

VENTURE CAPITAL, ACCELERATORS, AND B2G STARTUPS - The Infrastructure Gap in Financial Planning for Business-to-Government Companies

$183.5 billion. That's how much the US federal government awarded to small businesses in FY 2024 — an all-time record. The GovTech market is projected to hit $2.9 trillion by 2033. Funding is surging. Accelerators are multiplying. Government innovation offices are actively seeking startup partners. And yet, B2G startups keep dying. Not because their products fail. Not because the market isn't there. Because the financial tools they rely on — the same MRR-based templates, SaaS churn models, and linear growth projections that work beautifully for consumer software — are structurally incapable of modeling how government contracts actually work. Net-90 payment terms. Milestone-based invoicing. Multi-year commitments. S-curve adoption with 12–24 months of "Death Valley" before revenue accelerates. Working capital gaps that can exceed $500,000 before a single dollar arrives. Standard financial models hide all of this. The result: founders make spending decisions based on phantom revenue. Investors misprice risk using metrics designed for a different business model entirely. Accelerators evaluate companies with scorecards that don't match the operating reality those companies will face. We analyzed 50+ financial planning tools across four market segments. The finding: zero specifically address B2G revenue recognition, contract-based churn, or government payment cycle modeling. Not at the $150K enterprise tier. Not at the $300 template tier. Nowhere. We also examined regulatory requirements from the US GAO, UK Cabinet Office, and OECD — all of which mandate vendor financial viability assessment but offer no standardized framework for early-stage companies. The full report, "Venture Capital, Accelerators, and B2G Startups: The Infrastructure Gap in Financial Planning for Business-to-Government Companies," is a 20-page analytical deep-dive covering the VC blind spot, the accelerator paradox, the regulatory dimension, and what contract-aware financial infrastructure should actually look like.

Cash is a king

VENTURE CAPITAL, ACCELERATORS, AND B2G STARTUPS - The Infrastructure Gap in Financial Planning for Business-to-Government Companies

$183.5 billion. That's how much the US federal government awarded to small businesses in FY 2024 — an all-time record. The GovTech market is projected to hit $2.9 trillion by 2033. Funding is surging. Accelerators are multiplying. Government innovation offices are actively seeking startup partners. And yet, B2G startups keep dying. Not because their products fail. Not because the market isn't there. Because the financial tools they rely on — the same MRR-based templates, SaaS churn models, and linear growth projections that work beautifully for consumer software — are structurally incapable of modeling how government contracts actually work. Net-90 payment terms. Milestone-based invoicing. Multi-year commitments. S-curve adoption with 12–24 months of "Death Valley" before revenue accelerates. Working capital gaps that can exceed $500,000 before a single dollar arrives. Standard financial models hide all of this. The result: founders make spending decisions based on phantom revenue. Investors misprice risk using metrics designed for a different business model entirely. Accelerators evaluate companies with scorecards that don't match the operating reality those companies will face. We analyzed 50+ financial planning tools across four market segments. The finding: zero specifically address B2G revenue recognition, contract-based churn, or government payment cycle modeling. Not at the $150K enterprise tier. Not at the $300 template tier. Nowhere. We also examined regulatory requirements from the US GAO, UK Cabinet Office, and OECD — all of which mandate vendor financial viability assessment but offer no standardized framework for early-stage companies. The full report, "Venture Capital, Accelerators, and B2G Startups: The Infrastructure Gap in Financial Planning for Business-to-Government Companies," is a 20-page analytical deep-dive covering the VC blind spot, the accelerator paradox, the regulatory dimension, and what contract-aware financial infrastructure should actually look like.

Cash is a king

VENTURE CAPITAL, ACCELERATORS, AND B2G STARTUPS - The Infrastructure Gap in Financial Planning for Business-to-Government Companies

$183.5 billion. That's how much the US federal government awarded to small businesses in FY 2024 — an all-time record. The GovTech market is projected to hit $2.9 trillion by 2033. Funding is surging. Accelerators are multiplying. Government innovation offices are actively seeking startup partners. And yet, B2G startups keep dying. Not because their products fail. Not because the market isn't there. Because the financial tools they rely on — the same MRR-based templates, SaaS churn models, and linear growth projections that work beautifully for consumer software — are structurally incapable of modeling how government contracts actually work. Net-90 payment terms. Milestone-based invoicing. Multi-year commitments. S-curve adoption with 12–24 months of "Death Valley" before revenue accelerates. Working capital gaps that can exceed $500,000 before a single dollar arrives. Standard financial models hide all of this. The result: founders make spending decisions based on phantom revenue. Investors misprice risk using metrics designed for a different business model entirely. Accelerators evaluate companies with scorecards that don't match the operating reality those companies will face. We analyzed 50+ financial planning tools across four market segments. The finding: zero specifically address B2G revenue recognition, contract-based churn, or government payment cycle modeling. Not at the $150K enterprise tier. Not at the $300 template tier. Nowhere. We also examined regulatory requirements from the US GAO, UK Cabinet Office, and OECD — all of which mandate vendor financial viability assessment but offer no standardized framework for early-stage companies. The full report, "Venture Capital, Accelerators, and B2G Startups: The Infrastructure Gap in Financial Planning for Business-to-Government Companies," is a 20-page analytical deep-dive covering the VC blind spot, the accelerator paradox, the regulatory dimension, and what contract-aware financial infrastructure should actually look like.

Scenario planing

B2G fundraising process and common questions

→ "What's your sales cycle?" — Have the real data, not the optimistic version → "How do you handle payment delays?" — Show your working capital strategy → "What's your renewal rate?" — Explain why it's different from monthly churn → "Show me the downside scenario" — Have it modeled and ready → "When do you hit cash flow positive?" — Know the date and what drives it

Scenario planing

B2G fundraising process and common questions

→ "What's your sales cycle?" — Have the real data, not the optimistic version → "How do you handle payment delays?" — Show your working capital strategy → "What's your renewal rate?" — Explain why it's different from monthly churn → "Show me the downside scenario" — Have it modeled and ready → "When do you hit cash flow positive?" — Know the date and what drives it

Scenario planing

B2G fundraising process and common questions

→ "What's your sales cycle?" — Have the real data, not the optimistic version → "How do you handle payment delays?" — Show your working capital strategy → "What's your renewal rate?" — Explain why it's different from monthly churn → "Show me the downside scenario" — Have it modeled and ready → "When do you hit cash flow positive?" — Know the date and what drives it

Business Case

Cost Structure Breakdown

B2G businesses have a more complex cost structure, and getting it right matters for understanding your actual unit economics. Implementation isn't free — there are often subcontractor costs, partner fees, setup labor that varies by customer segment. Third-party licenses might be billed annually per user or per transaction. Delivery costs might include SMS notifications, payment processing with different rates for different payment types, or API calls to government systems.

Business Case

Cost Structure Breakdown

B2G businesses have a more complex cost structure, and getting it right matters for understanding your actual unit economics. Implementation isn't free — there are often subcontractor costs, partner fees, setup labor that varies by customer segment. Third-party licenses might be billed annually per user or per transaction. Delivery costs might include SMS notifications, payment processing with different rates for different payment types, or API calls to government systems.

Business Case

Cost Structure Breakdown

B2G businesses have a more complex cost structure, and getting it right matters for understanding your actual unit economics. Implementation isn't free — there are often subcontractor costs, partner fees, setup labor that varies by customer segment. Third-party licenses might be billed annually per user or per transaction. Delivery costs might include SMS notifications, payment processing with different rates for different payment types, or API calls to government systems.